What is recession???

Question

I was browsing on CNNMoney.com and they were discussing a possible recession...I'm assuming its a bad thing for us in this country? Is like the Depression or is just that the economy is going to be majorly screwed up than it already is...

Is it a possibility and what will happen if there is a "recession"?

Answer 1

We are about to find out,,,,,,, a real nice one is coming,,,,,
lots of un-employment.....homeless.....hungry people...... while the rich are putting their money in gold and leaving the country,,,,, it is going to be a party for us poor people.......but we voted for him so hey,,,,,we cant complain much,,,,,,,unless we didnt vote for him,,,,hmmm

Answer 2

Academically, a recession is two consecutive quarters (6 months) of negative GDP growth.

There were murmurings that a Fed rate cut would happen in March to ward off a recession (similarly to the correct timing of 1995) -- however, data yesterday showing rebounding housing prices and strong consumer confidence may cause them not to. This may cause rate cuts happening too late, such as in 2001.

Answer 3

A recession is an economic downturn when output falls owing to pressures on profits of firms. Product prices may not increase with costs and firms restrict their production. One consequence could be 'lay offs' or reduction in the workforce leading to lower employment levels. however, it is generally not deep like a depression and may last short periods and may impact only some segments of economic activity. It may have serious effect on stock prices which may take a beating in the short run.

Answer 4

recession

noun
1. the state of the economy declines; a widespread decline in the GDP and employment and trade lasting from six months to a year

An economic situation where demand is sluggish, output is not rising, and unemployment is on the increase. Not as severe a downturn as a depression, a recession is usually identified when gross domestic product falls for two successive quarters. Recession in the UK occurred in 1974–5 and 1980–2, and was internationally widespread in 1990–3.

A recession is defined in macroeconomics as a decline in a country's real Gross Domestic Product (GDP) for two or more successive quarters of a year (equivalently, two consecutive quarters of negative economic growth). A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation. A severe or long recession is referred to as an economic depression.
Market-oriented economies are characterized by economic cycles, but actual recessions (declines in economic activity) do not always result. There is much debate as to whether government intervention smooths the cycle (see Keynesianism), exaggerates it (see Real business cycle theory), or even creates it (see monetarism).

The precise causes of recession are the subject of fierce debate among academics and policy makers. Most would agree though that recessions are caused by some combination of endogenous cyclical forces and exogenous shocks. For example, Keynesian economists, Real business cycle theorists, and Monetarists would all disagree about the precise cause of the business cycle, but most would agree that purely exogenous factors like the price of oil, weather conditions, or a war could by themselves cause a temporary recession, or, conversely, short term economic growth.

Prior to the Great Depression, a huge wave of investing in the stock market had taken place, which created artificially high prices of stock. This process was driven by the fact that shares were being used as a collateral for loans in order to buy more stocks (ie. buying stocks on margins). When the economy showed signs of slowing and share prices plummeted, this caused an extensive domino effect. As investments lost their face value and the loans on them "went bad," many financial institutions collapsed, triggering a monetary crisis. This led to the the famous run on the banks, in which massive withdrawls of bank deposits led some banks to collapse, confirming investors' fears and inspiring more withdrawls.

When U.S. President Franklin D. Roosevelt entered office in 1933, he began an aggressive program of reform called the New Deal with three goals, to provide immediate relief for the unemployed, to recover the economy to normal levels, and to reform the system so it would never happen again. Roosevelt got GNP moving upward again, with 11% annual growth 1933-36.

To date no repetitions of the Great Depression have happened in the industrial world. However, Many Latin American countries suffered a severe economic slump coupled with high inflation in the 1980s, Japan suffered from a depression during the 1990s, and the former Communist states of central and eastern Europe also fell into an economic depression during the transition to capitalist economies. Additionally, the term "depression" may be used to describe the situation of many poorer countries in the Third World (although in many cases these countries never achieved sustained economic development in the first place).

The Great Depression in Europe was one of the reasons for the public acceptance of Adolf Hitler and other extremist fascist groups. Their power was the main cause of World War II which, ironically, was a source of great (but costly) economic stimulation.

Answer 5

no big deal, many countries face recession, its not that serious
recession is a decline in a country's real (GDP)Gross Domestic Product(GDP is a certain measurment of a country's economy) for two or more successive quarters of a year.
this shouldnt make u worried cause i'm sure ur country faced it many times before like any other country, it will pass.

Answer 6

theres 4

re·ces·sion
–noun
1. the act of receding or withdrawing.
2. a receding part of a wall, building, etc.
3. a withdrawing procession, as at the end of a religious service.
4. Economics. a period of an economic contraction, sometimes limited in scope or duration.

Answer 7

Prices on stuff goes down, putting the squeeze on profits for companies and possibly resulting in layoffs, resulting in lower prices, and uncontrolled repeated rounds of continuing lower prices and layoffs.

Answer 8

If there is a recession "someone" you know loses their job or business...

If there is a depression "a lot" of people you know lose their jobs or businesses...

Does this help any?

Answer 9

A recession is defined in macroeconomics as a decline in a country's real Gross Domestic Product (GDP) for two or more successive quarters of a year (equivalently, two consecutive quarters of negative real economic growth). A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation. A severe or long recession is referred to as an economic depression.

The precise causes of recession are the subject of fierce debate among academics and policy makers. Most would agree though that recessions are caused by some combination of endogenous cyclical forces and exogenous shocks. For example, Keynesian economists, Real business cycle theorists, and Monetarists would all disagree about the precise cause of the business cycle, but most would agree that purely exogenous factors like the price of oil, weather conditions, or a war could by themselves cause a temporary recession, or, conversely, short term economic growth. Austrian school economists hold that it is an inflation of the money supply that causes modern recessions and that recessions are positive forces in-so-much that they are the market's natural mechanism of undoing the misallocation of resources present during the “boom” or inflationary phase.
This is a list of notable recessions, financial crises, depressions and downturns. All dates are approximate as the recessions began and ended in different parts of the world at different times. Also note that before detailed economic statistics began to be gathered in the nineteenth century it was very difficult to tell when recessions occurred, but prior to industrialization economic downturns usually were caused by external actions on the economic system like wars and variations of the weather.

Panic of 1819 (1819 - 1824), the first major financial crisis in the United States.
Panic of 1837 (1837 - 1843), a sharp downturn in the American economy caused by bank failures and lack of confidence in the paper currency
Panic of 1857 (1857 - 1860), failure of the Ohio Life Insurance and Trust Co. bursts a European speculative bubble in U.S. railroads and loss of confidence in U.S. banks
Panic of 1873 (1873 - 1879), economic problems in Europe prompt the failure of Jay Cooke & Company, the largest bank in the U.S., bursting the post-Civil War speculative bubble
Long Depression (1873 - 1896), begins with the collapse of the Vienna Stock Exchange and spreads throughout the world. Some historians do not believe it is actually one large recession. It is important to note that during this period the global industrial production greatly increased. In the US for example, industrial output increased 4 times.
Panic of 1893 (1893 - 1896), failure of the U.S. Reading Railroad and withdrawal of European investment leads to a stock market and banking collapse
Panic of 1907 (1907 - 1908), begins with a run on Knickerbocker Trust Company stock October 22nd 1907 sets events in motion that will lead to a depression in the United States.
Post-WWI recession - marked by severe hyperinflation in Europe over production in North America. Very sharp, but also brief.
Great Depression (1929 to late 1930s, stock market crash, banking collapse in the United States sparks a global downturn, including a second downturn in the U.S., the Recession of 1937.
Post-Korean War Recession (1953 - 1954) - The Recession of 1953 was a demand-driven recession due to poor government policies and high interest rates.
1973 oil crisis - a quadrupuling of oil prices by OPEC coupled with high government spending due to the Vietnam War leads to stagflation in the United States.
1979 energy crisis - 1979 until 1980, the Iranian Revolution sharply increases the price of oil
Early 1980s recession - 1982 and 1983, caused by tight monetary policy in the U.S. to control inflation and sharp correction to overproduction of the previous decade which had been masked by inflation
Great Commodities Depression - 1980 to 2000, general recession in commodity prices
Late 1980s recession - 1988 to 1992, collapse of junk bonds and a sharp stock crash in the United States leads to a recession in much of the West
Japanese recession - 1991 to present, collapse of a real estate bubble and more fundamental problems halts Japan's once astronomical growth
Asian financial crisis - 1997, a collapse of the Thai currency inflicts damage on many of the economies of Asia
Early 2000s recession - 2001 to 2003: the collapse of the Dot Com Bubble, September 11th attacks and accounting scandals contribute to a relatively mild contraction in the North American economy.